Analysis: Little sign Abe can shake up Japan's inbound FDI http://t.co/I7lf00RCMt
14 minutes ago
-
US Treasury Climbing on Mirrors to Avoid Uttering the M-Word..and Needing to Learn That It Takes Two to Tango..
So, thankfully, the US Treasury decided not to utter the dirty M (Manipulation) word about China’s currency policies (hear here my interview on Bloomberg Radio for a snap reaction on this report) The decision makes sense as: – China is a big power that does not let itself be bullied easily and a confrontational approach would [...]
-
Will China be Branded Manipulator? Will China Let the RMB Appreciate Faster and How Will Other Asian Currencies React?
The U.S. Treasury will publish on Wednesday its bi-yearly currency report where it will decide whether to brand China as a currency “manipulator”. In a new RGE note (for RGE premium users) Brad Seter and I discuss the economic and political considerations related to the U.S. decision on whether to utter the M (Manipulation) word and the broader [...]
-
Risks of EMU Break-Up: Exaggerated or Understated?
I have recently written a presentation in powerpoint format (available to RGE registered users here) on the risks of a EMU break-up. In this note I consider some worrisome economic trends in some Eurozone economies, the increasing divergence of growth rates within EMU, the relative costs and benefits of an EMU exit, the scenarios on whether such [...]
-
Munchau on Italy and the Euro..and the Continued Tremonti Clown Show…
Today Wolfgang Munchau wrote – in his FT column – that Italy risks exiting EMU if it does not undertake the economic reforms needed to restore its lost competitiveness. These arguments are not new to those – like myself and Lachman – who have expressed similar concerns in the recent past. But characteristically of the [...]
-
Why Oil at $70 Would Have Serious Negative Effects on U.S. and Global Economic Growth
Oil prices are surging again, close to $69 dollar a barrel this morning. After reaching a peak above $70 a barrel following the “Katrita” hurricanes of the summer of 2005, oil price fell to the low 60s in the fall and winter of 2005 as the summer peak season of high oil demand passed and [...]
-
Today Iceland: Tomorrow Turkey, Hungary, Australia, New Zealand, Spain, U.S.?
The recent speculative attack against the Icelandic currency and the incipient run on its banks is no news (actually a deja-vu as my co-author Brad Setser says) to students of financial crises in emerging market economies; Brad and I wrote an entire book about it. A combination of a large and growing current account deficit, driven in part [...]
-
U.S. and China: On a Collision Course on the RMB this year? The Systemic Financial Risks of a U.S.-China Trade War
It looks like the U.S. and China are on a serious collision course on the issue of the exchange rate policy of China. Ther risks of a trade war triggered by the U.S. branding China as a currency manipulator – and the severe financial market repercussions of such developments – are serious and not clearly appreciated [...]
-
Roubini, not the IMF, is concerned about Italy and EMU
In an interview this week for the German magazine Wirtschaftswoche I have reiterated my concerns about Italy’s economic conditions and the risks that, unless Italy implements serious economic reforms that increase productivity, Italy will eventually be forced to exit EMU in the next five years. Unfortunately, the Italian press (see here) is reporting today these views and the [...]
-
China’s Next Houdini’s Trick: How to Stop Intervening in the Forex Market and Still Maintain the RMB Peg
As the political heat of the U.S. pushing China to slow down forex intervention and allowing the RMB appreciate is building up, the Chinese authorities may be starting to think about how to significantly reduce their rate of forex intervention while still maintaining the value of the RMB very stable: if that trick were possible China could legitimately argue [...]
-
Is the ECB tightening too much too fast risking to clip the wings of a fragile Eurozone recovery?
As expected, today the ECB decided to increase its policy rate to 2.5%; less expectedly, Trichet’s tone was hawkish signaling further interest rate increases at future meetings of the ECB board; thus, the bond market fallout today from his statements. But a serious question remains open: is the ECB rising rates too fast? Will it tighten too much [...]
